What is OTC Crypto Exchange? How does it work?

Today, crypto users demand more from a crypto exchange. Spot, margin, and futures are okay! But something more flexible with negotiable trade is what they seek. And OTC crypto exchanges stand as the prime solution for this.

Reason?

OTC trades don’t have any limit, and don’t impact the order book. And this is what many retail traders and investors want. And this strong need made the Crypto OTC exchange a mega hit in this decade. So, what are we gonna look into in this article?

Key Takeaways 

• What is OTC crypto exchange, and how does it work?
• Core features, security protocols, and advanced trading features of a crypto OTC trading exchange.
• Popular Crypto OTC exchanges in the market with their benefits.

What is OTC Crypto Exchange?

OTC Crypto Exchange is a software that allows users to trade bulk cryptocurrencies directly without impacting the public orderbook. All the trades are carried out by the OTC desk with high volume, and avoiding slippage.

Both parties can negotiate the price, payment methods, and even the settlements between them. Since there are lenient regulations, more retail traders, institutional investors, and professional traders prefer OTC crypto exchanges.

Features of Crypto OTC Trading Exchange

Wallet Management

Enhances OTC exchange’s convenience by enabling users to manage all their assets in one centralized location while implementing strong security measures to protect their funds.

Market Outlook

Offering continuously updated real-time market data increases user engagement, driving higher trading volumes and attracting a wider audience to the crypto OTC exchange.

Trading Features

Cater to both novice and experienced traders by supporting Spot, Margin, and Futures trading options, while ensuring the trading engine remains stable and efficient.

Orders

Boost user satisfaction by providing various customizable order types, including Limit, Market, Stop-Limit, and Trailing Stop orders, allowing traders to tailor their strategies.

Secure Payment Gateway

Simplify the process for newcomers to deposit and withdraw funds on the crypto OTC trading exchange, thereby expanding the user base and strengthening the platform’s reach.

User-friendly Interface

Deliver a smooth user experience with adaptable dashboards, constantly refining the layout and features to keep the interface intuitive and simple to navigate.

How does OTC Crypto Exchanges Work?

Step 1: User Verification

Users provide their government-issued ID and other necessary details for admin approval and identity confirmation.

Step 2: Fund Deposit

Once verified, users connect their wallets and deposit funds to initiate trading activities in the crypto OTC exchange.

Step 3: Defining Buyer Needs

Buyers specify key trade details such as asset type, price expectations, quantity, and preferred settlement conditions.

Step 4: Quote Request

These requirements are forwarded to potential sellers, inviting them to submit competitive offers.

Step 5: Evaluation

Buyers carefully assess the submitted quotes, comparing prices and terms to identify the best options.

Step 6: Negotiation Process

Buyers and sellers engage in discussions to refine offers and reach mutually agreeable terms.

Step 7: Choosing a Seller

Buyers finalize their choice by selecting the seller that delivers the most favorable combination of price and conditions.

Step 8: Trade Settlement

An escrow service securely holds the assets until all parties confirm, guaranteeing a smooth and secure transaction completion.

Security Features of OTC Crypto Exchange

Identity Verification

Admin verifies that the user information accurately corresponds with their official government-issued ID. This process builds confidence among users while helping to detect and prevent fraudulent accounts.

Address Approval

Admin boosts user trust and satisfaction by assisting with any issues related to address submissions or delays within the OTC crypto exchange system. 

Device Oversight

Admins keep track of user device logins to safeguard accounts from unauthorized access. This vigilance helps maintain the security and trustworthiness of the OTC crypto trading platform.

Escrow Management

Admin facilitates seamless escrow operations during active OTC trades, securely holding and releasing funds as agreed to ensure smooth transaction flow.

Cold Storage Audits

Admin regularly inspects the cold storage system to guarantee its proper functionality. This provides top-tier protection and safeguards assets at all times in a crypto OTC trading exchange.

Monitoring Account Actions

Admins maintain detailed logs, trigger alerts for any suspicious behavior, and take swift measures such as locking accounts when necessary. Event tracking and retention policies are in place to uphold strong security protocols.

Security Alerts

You keep your users informed by sending timely SMS and email notifications about login attempts or password changes, reinforcing the protection of their assets on your OTC crypto platform.

Advanced Trading Features of OTC Crypto Exchange

OTC Spot Block Trading

Admin enable tailored price discussions between buyers and sellers, enhancing liquidity within your OTC crypto exchange platform.

OTC Option Trading

The platform allows users to execute large-volume option trades with expiration dates, helping them choose optimal strike prices, contract sizes, and expiry terms.

Algo Orders

The admin monitors order execution in real time, ensuring fulfillment aligns with preset strategies like TWAP and POV, including options for delayed start times.

OTC Basis Trading

Attract seasoned traders by offering a flexible approach to simultaneously hold positions in spot and futures markets. While continuously analyzing market trends to adjust strategies.

Integrating these features to a crypto exchange helps businesses create a trusted brand in the crypto industry.

Check out >> Cost to Build OTC Exchange

Popular Crypto OTC Trading Exchange in the Market

Binance OTC

• Extremely high liquidity for large-volume trades
•  Wide range of crypto assets and fiat currency support
• 24/7 OTC trading desk with personalized support

Benefits
Ideal for institutional and high-net-worth individuals needing fast, large-scale trades without affecting market prices. Offers competitive pricing and fast settlement.

Kraken OTC

• Deep liquidity and global coverage
• Dedicated OTC desk for high-volume traders
• Trade settlement via secure, segregated custody

Benefits
Trusted by institutions for its strong regulatory compliance and security. Offers tailored service for trades starting at $100,000.

Coinbase Prime (OTC Desk)

• Integrated with Coinbase’s main exchange and custody
• Deep liquidity and real-time pricing access
• White-glove OTC service with trade settlement support

Benefits
Well-suited for institutions seeking regulated, compliant trading in the U.S. Offers ease of use with institutional-grade tools and post-trade reporting.

OKX OTC

• Supports fiat-to-crypto and crypto-to-crypto OTC trading
• Trade execution with high speed
• Competitive pricing and liquidity

Benefits
Great for global users needing fast fiat onboarding and crypto liquidity. Offers wide asset support and responsive trade desk services.

Conclusion

Hope you’ve got a clear idea about what an OTC crypto exchange is and how crypto OTC exchange works. OTC exchange is the best option for high-volume traders and retail traders, and investors.

The use cases of OTC exchange crypto are enormous. It is compliant with the updated regulations and enriched with security protocols and advanced trading features. There are lots of crypto exchanges are provide OTC services. Binance, Kraken, and Coinbase are there, and why not your OTC crypto exchange platform too?

Yeah! Starting a crypto OTC trading platform is the best startup plan for entrepreneurs wishing to start a business in the long term. It’s ideal for business minds to reap large profits in the promising ROI.

If you’ve made up your mind for this, adopt an OTC Crypto Exchange Script to start your venture strong and powerful!